4.1 Short-Term Business Planning
Cost center planning is a component of short-term business planning. Short-term refers to a planning horizon for the duration of a fiscal year. In short-term business planning, the following sub-plans are created:
One or more sales plans
One or more master production schedules
One or more cost plans
One or more operating profit plans
The planning process combines the individual planning areas into an integrated planning network. The following figure shows how the individual planning areas are linked to one another.
Sales Plan: The starting point for short-term planning is the sales plan. It establishes the quantities to be sold in the planning period. Generally, the sales plan is created by Sales and Distribution (SD) and Controlling (CO). The plan production volumes (Product Hierarchy Level 3: Grade) are forwarded to Production Planning (PP) because this module reconciles plan capacities and activities.